Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May:Indicate the effect of each transaction on the following accounting equation elements (Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows:(1) Asset (Cash) increases by $18,000; Common Stock increases by $18,000. Element Item Direction1. Received cash in exchange for common stock, $18,000. Asset Cash Increases Common Stock Increases2. Paid advertising expense, $4,850. 3. Purchased supplies on account, $2,100. 4. Billed customers for delivery services on account, $14,700. 5. Received cash from customers on account, $8,200.

Answer and Explanation:

The indication and effect of each transaction are as follows

Particulars                                  Element       Item     Direction

1. Received cash in exchange

for common stock, $18,000.          Asset     Cash     Increases

                                                   Common Stock      Increases

It increased both assets and the common stock

2. Paid advertising expense,

$4,850.                           ExpenseAdvertising ExpenseIncreases

                                         Asset                  Cash                 Decreases

It increased the expenses and reduced the assets

3. Purchased supplies on account,

$2,100.                                          Asset   SuppliesIncreases

                                                      LiabilityAccounts Payable Increases

It increased the assets and also increased the liabilities

4. Billed customers for delivery

services on account, $14,700. Asset   Accounts Receivable   Increases

                                                  Revenue Delivery Service Fees Increases

It increased the assets and the revenue is also increased

5. Received cash from

customers on account, $8,200.  Asset     Cash       Increases

                                              Asset    Accounts Receivable Decreases

It increased the assets in cash but it reduced the assets i.e account receivable

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